Brent – 00:00:01:
Welcome to Freight Nation, a trucking podcast where we explore the fascinating world of trucking and freight management. We dive deep into the freight industry and uncover why the trucking industry is more crucial to our country now than ever before. Stay tuned to uncover the driving forces behind successful trucking businesses and hear from the hardworking truckers and leaders who keep the world moving. Let’s hit the road. All right, well, welcome back, Freight Nation. I hope everybody’s doing great out there. You know, I love doing Freight Nation. I love this podcast. I love it because I get to hear such great stories about what someone’s journey was in trucking. And that’s really what the whole purpose of the Freight Nation podcast is about, is about for you as the watcher and the listener to really hear a story that maybe you identify with and you can say, hey, maybe that’s part of my story or I could do that too. And boy, do we have a great one today. I tell you, for Brett, for my journey in this industry, which started in 1998, there’s a few people that really are like mile markers along the way for me personally in my growth in this marketplace. And the guest we have on today is an absolute biggest part of that mile marker for me. So joining us today is Todd Amen, the CEO of American Truck Business Services and also known as American Truck Business Services. So Todd, thanks for joining us today on Freight Nation.
Todd – 00:01:15:
Brent, it’s a joy as always. I love when we get to speak together, whether it’s on the cell phone about our lives or on a podcast about business. So we’re glad to have you on the show. Anything else? You’ve been a dear friend and a dear business partner since 1998. That’s when we started American Truck Business Services. I don’t know if you knew that or not, but we’re cohorts in crime for 26 years now.
Brent – 00:01:36:
Yeah, we sure have been. I tell you, one of the reasons that I appreciate Todd’s, we have a lot of things that are similar. He’s one of three brothers. He’s the middle brother. I’m the middle brother. He works with his family. He works with his dad. I got to work with my dad. So we’ve got to share lots and lots of stories about just kind of growing up around working with family and what does it mean to be that. And then Todd still gets to work with his brothers, which is a really cool thing at ATBS. But for me, well, this journey started with me was back when I was working for Overdrive Magazine and we were trying to help owner operators learn and understand their business even better. And so when Overdrive brought out partners of business, a couple of years we got into it, we were able to become partners, partners of business, partners with ATBS. And for them to help us bring forth the type of information that really could beneficially help owner operators run their business and to get to allow them to do more of what they love to do, which is to drive the truck. And so Todd’s been such a great education for me in this market. I just hold this friendship and our business relationship dear to what my experience has been in trucking. So it’s really great to have Todd on today. He’s going to get to tell his story about how he started ATBS and where ATBS is going. And then we’ll talk a little bit about the market. So Todd, before we jump into ATBS, you come from a great, great history and background of trucking. So some of you know that whole diesel in the blood thing. I hear this a lot, but I think it’s a little different for you because you got to work with your dad and you guys owned a fleet. This is kind of what started you in this. As we started this podcast, can you talk a little bit about what your experience was like really just working with your dad? Because so many people in trucking get to work with family members, especially sons working with dads.
Todd – 00:03:11:
Yeah, Brent, my dad turns 90 this year. So we’re blessed to still have him with us. And he was a farmer growing up, realized the farm wasn’t for him. So he went out in the world and did a few things and wound up in the trucking industry. And too long a story for this, but he wound up buying a truck with three trucks back in the regulated days of LTL trucking in the early 60s. And as he went along and had three sons, like all good farmers and all good truckers do, he gave us a work ethic. And from 12 years old on, he went to work with dad in the summer from 6 a.m. To 6 p.m. At a minimum and did everything from grease trucks and break out wooden floors to replace them to move into the office and rate bills. And, you know, I think I probably resented it back in those days because my buddies were out playing football on the cul-de-sac or hanging out at the swimming pool with pretty girls. And I came home greasy every night. My mom didn’t even recognize me because I would bend down the shop. But I learned the business, you know, from the ground up, literally, and fell in love with it. It’s real funny because when you’re a young kid working in a shop like that and people don’t know that you’re the owner’s son, they come in and give you advice and say, son, you know, go to college, get yourself a degree. You don’t want to do this the rest of your life. I don’t know why you’re here. And you just get to have some real heart-to-heart conversations with truck drivers. And I just fell in love with them back in those days because they’re such honest, great, nice, hardworking people. And so I just knew probably the rest of my life, no matter what it was, I would be doing something in trucking and with truck drivers. And short story is we ran our truck line. We took it over from our dad together, my brothers and I, after we got out of college for about eight years.
Brent – 00:04:48:
What year was that you took it over?
Todd – 00:04:50:
Really early 90. I mean, Jeff’s the oldest, I’m the middle, I’m the youngest. So between 1988 and 1993, we all went into the business and ran it together for about five years. And we sold it in 1998 in January and in March started ATBS. So yeah, diesel in the veins, there’s no doubt about it. I love trucking, but I’ve also told people I’ve owned trucks two times in my life, once at that fleet and once a truck leasing business. And I’ve said, if I want to buy another truck, someone please shoot me in the head because trucking is a hard business. There’s no doubt about it.
Brent – 00:05:24:
It is a hard business. All right. So before we jump into this, I want you to tell me like, tell me one of the best stories about how your dad had to maybe correct you on something. Cause I worked with my dad too, off and on from when I was 14 years old and my dad owned a small steel processing company. So we were out in the warehouse too, man, taking inventory, sweeping floors, cleaning out toilets, anything that was not in the office. It was all my dad. That was the work he had for us. And he, you know, he said, son, you’re going to learn that all honest work has merit and you’re going to learn it out on the dock. So that’s where you’re going to be. And so learn how to drive a Ford truck, which was kind of cool. And I’m surprised I didn’t kill my brothers. But before you jump into ATBS and when you guys sold the business, what was one of the stories about your dad? You know, that you go, okay, this was one of the pivotal things with my dad.
Todd – 00:06:06:
Yeah. Maybe my favorite story, because my dad grew up in an era where small truck lines became big truck lines after deregulation. So all the Swift and Chevron, the Schneider, you know, everybody really grew. And also my dad was of the age of many of those men. And my dad, when he decided he was ready to retire, he was ready to retire. He bought a house in Arizona, worked from Colorado. He was sick of the snow. And literally when he kind of turned the keys over to Matt and Jeff and myself, he did that. And he went South and he golfed and he would come back and we would talk. And he said, you know, boys, one thing, he calls boys, men, now that you’re running the business, one thing I’m not going to do is what I see all of my friends do to their children that are running their truck, right? They practice pigeon management. They fly South for the winter and then they go back North and they crap all over everything their kids have been doing for the last six months. And he said, I’ve raised you. I’ve taught you how to work. You’re smart. You’ve got an education. And so I’m going to let you run. And he really did. And I respected that about him because he let us make our own mistakes. He didn’t second guess us. And it’s pretty awesome because I do know so many patriarch truckers that never really gave their kids the full chance to be the success that they should have been.
Brent – 00:07:18:
That’s pretty cool. How wise of your dad. Now, okay. So now you’ve got a business that’s been around since 98 now. I know your kids have worked with you on and off, I think at times. I know when I was in your office just this time last year, I got to see your daughter was working with you. So tell me how have you applied any of that with your kids working with you?
Todd – 00:07:36:
You know, I have. Mostly I’ve taught my kids to work hard. They weren’t on the shop floor, but they were doing other things from the time they were very young. And I’d said I’ve almost discouraged them from going into our business. Because I want them to have the sense of making it on their own. And they’ve come in and out of the business. My daughter is here full time doing a wonderful job for us. So yeah, more than anything, you know, it’s not like the old days where you demand your children come do what you did and follow you and carry on your legacy. And, you know, if my kids wind up here, they’ll wind up here on their own choice because it’s a good opportunity and something that they really want to do. Not because I’m going to make them do it for sure.
Brent – 00:08:15:
Right. Yeah. Well, that’s cool. I know I got to work with my dad and I worked for my dad. And then I owned a little small T-shirt screen printing company. And my dad actually worked with me, which was a very flip-flop of the old responsibilities there. It was interesting me trying to tell my dad what to do, which, you know, I’m a normal sized guy. My dad was a beast of a man. You know, it was always difficult for me to say, Dad, I need you to go do this. So I treasure those times. And I know you did too, working with your dad. So what a cool part of the story. So your dad, he empowered you. He enabled you to run the business. And then you guys sold the business. And then I want to shift into ATBS, how you guys got to be this leader in the industry of really helping owner operators run their businesses as ball fleets. All right. So there was that pivotal time where you guys were selling the business, but you had already started some of ATBS, correct me if I’m wrong, but you’ve already started ATBS a little bit before you decided to sell the business, right? You guys were already running part of that. Am I correct in that?
Todd – 00:09:09:
You know, not exactly, but the idea came from watching drivers struggle. So in the mid nineties, as we were, fully engaged, running the business, our single biggest frustration is the single biggest frustration still today, 30 some years later, is driver turnover, you know, and people not really caring about their job. And unfortunately, our industry trains drivers to be victims kind of from the time they’re in driver training school to on they go and it’s always somebody else’s fault. And it was just frustrating to have a hundred percent driver turnover. We were partly to blame for that, but at the same time, we just could not pay drivers enough to care about, doing the right things that we thought they needed to do to run their truck. We tried to actually find software and create our own that we could judge individual profitability of trucks. And you just couldn’t do that in the nineties. And our ultimate decision was we were gonna create a owner operator lease purchase fleet. And, you know, as strange as that sounds today, because it’s everywhere, it’s kind of just what a lot of the industry does. Back in those days, there were almost no examples. There were only a couple of fleets that had done it. And the fleets that had done it really kind of turned it around. They were like, let’s turn them into screw the driver programs. Let’s make money off drivers. And what we realized was we were spending a ton of money just on this driver churn. When we did the math, our drivers back in those days could give themselves a 40% pay increase if they ran their business anywhere like we thought they could. And at the same time as a company, we could make a lot more money, at least a million dollars more bottom line. We were all financially background, you know, educated guys. And it didn’t make sense. Like how can one party win and the other party not lose? That’s usually the way economics works in a zero sum game, but it looked like a win-win. And we literally decided to convert our hundreds of drivers from company drivers to owner operators. And we did it in eight months. We met with them each individually and personally, and went through it and signed agreements. And it turned out to be a great thing, really exactly what we expected it would. Drivers made more money, company made more money. What was missing was the drivers now had a vested interest. They cared about what they were doing. They cared about better fuel economy. They cared about better tire wear, but they didn’t know how to accomplish that. And so they wanted to learn. And we didn’t have the ability to teach them because we’re busy running a truck line. And so I tried to find somebody that could help them. And that’s really where the idea of ATBS came was there was nobody in America at that time that was a business coach for our operators or even did taxes specializing in our operators. It was a very cottage mom and pop business. And I just knew that was the road I wanted to go down. The day we sold our truck line was just to help drivers be more successful in their business.
Brent – 00:11:47:
So you sold the trucking company, you guys started down the endeavor of ATBS. What was the biggest hurdle to get over when you guys launched the software, launched the product? What was the biggest hurdle that, because I mean, you know, business owners and business owners, there’s always, there’s always when you launch something, there’s always those challenges of getting something to the market and getting people to say, oh, this is a great idea. What was the biggest hurdle, the first biggest hurdle we get over? Because I know there’s been a lot.
Todd – 00:12:10:
Oh, you know, it’s funny because it’s just 25 years ago, but I’ll just start by saying there was no internet. Like the internet had just been created. So even just getting the idea into the market, you had maybe advertised through places like Overdrive or put flyers in truck stops. And we had a good idea because we partnered with truck lines. The lease purchase idea took off in the industry and many fleets created lease purchases back then. And, you know, our goal was to educate fleets and drivers at the same time that there shouldn’t be a screw the driver, let’s make money off the back of the driver program. Because if they’re successful, you’re successful. So we were blessed and now we struck up a lot of partnerships with a lot of good truck lines that were committed to successful drivers. And so the single artist thing was getting the driver to want to participate. They knew they had to do taxes. And in the end, that’s what they sent paperwork for. And that meant Jack Daniel’s boxes full of thousands of receipts on, you know, March 10th, expecting my tax return by April 15th. But we couldn’t help them in their business unless we got information from them throughout the year and we could account for their business. And we could help them understand their business. And for sure, until technology helped them prove that process, just literally getting millions of envelopes and receipts until really technology helped to solve that problem.
Brent – 00:13:31:
Wow. So it was just the mass of organization on both ends, helping the owner operator to understand how they needed to organize so you could help them be more successful. And so that sounds like a big endeavor, asking somebody to change their business, their sort of lifestyle and how they’re doing things to see that it could be a better opportunity for them. How did you guys like convince the owner operator or convince the small trucking company owner? How’d you convince them that this was the way they needed to do it?
Todd – 00:13:57:
You know, Brent, man, it goes back to where we started in those meeting rooms in Louisville, Kentucky and the Great American Truck Show and working with guys like you and partners in business. And this was an easy business 26 years ago. If I was an owner operator to be successful, I had to do two things. I had to shut my door and I had to press my pedal to the metal, right? That’s all they cared about was running miles as fast as they could. They drove 140,000 miles a year back then and that’s how they made money. They drove 100,000, they went broke. When you and I were in a partners in business room with 400 people in the room and you said, how many of you know what your cost per mile is? Or even easier, how many of you know what your miles per gallon is? Because back then the trucks didn’t tell you what your miles per gallon is and you would have less than 3% of the room raise their hands. It was obviously an uphill challenge. And so to kind of, tease them with information by saying, you can actually make more money by saving a dollar rather than generating an extra dollar of revenue because a dollar saved is 100% bottom line and extra dollar of driving faster and more, you still have to pay cost to do that. So little enticing things to tell a guy with a big yellow Peterbilt that he should drive 65 instead of 80, you’d have thought that you cussed about his mom. That was like telling him something that was unheard of. He would never even think that way. But the world changes and you have hurricane katrina and fuel spikes to five bucks for the first time in 2005 and so drivers got hungry for the information on how to succeed in their business, other than shut the door, And drive as fast as you can.
Brent – 00:15:45:
This is great. So, The operating environment has allowed for a lot of change. As you’ve seen within the honor operator, that’s what you talked about about 2005 and the fuel prices are being high and the things that get your attention allow you to make change. So you guys started 1998, it’s 2024, by the way, I get to enjoy my water every day and my TBS cup. By the way, I keep this cup because of my friendship with you and your brothers. And so just because to remind me about one of the things I love about trucking is it really is a relationship industry where people value knowing each other. So that’s one of the things that keeps me, reminds me of this. All right. So you were talking about, you used to be able to get in the truck, shut the door, press the gas. You’re making money because you could drive a lot of miles. Well, we got ELDs today. Every inch is measured. What have been some of the changes you’ve seen with truckers inside just the last, say seven or eight years, because technology has advanced forward on both ends, on what they have to have in their truck and what they have access to, the data they have access to. What are some of the changes you’ve seen among the owner operator that have been a benefit? And what are some of the ones that you see that have not been a benefit to them?
Todd – 00:16:33:
Brent, you know, because you do it every day, the information you guys have in truckstop.com that even wasn’t available, like the market demand index was really great to pay attention to for the last 15 years, but very few people did. And it’s become almost a stock market index type indicator on a weekly basis. So you can look at that at 40,000 feet and then you can drill down. So really just data and information, the smart drivers, there’s too much, right? So a driver can’t absorb that all. And so they find the things that matter to them, whether it’s a great fuel program with a discount, or even a fuel optimization program that helps me buy the right amount of fuel, at the right places. Everybody can go as deep as they want, right? They can operate at 40,000 feet and just slow down and idle less, or they can actually use optimization on the revenue side. They can subscribe to truckstop.com and go really deep in specific market areas and understand markets. So I guess what I would say is the most successful use that information to find great niches and shift their business and adjust when they need to, like times like the last two years to continue to make it. The not successful are the ones that put their head in the sand, and think they can just do what they’ve always done. Our markets move quick, people are smart, and the successful adjust quickly. And I have to have information to do that. So really it’s about using information to change my business. I love saying that an owner operator can literally change their business this afternoon. A 10,000 truck tuck line, it takes them a year. I mean, if you think about what’s going on right now in adjusting rates and trying to save money on fuel, if I’ve got to adjust a fleet of 10,000 trucks, it’s like turning the Titanic away from the iceberg. If I’m an owner operator, I can turn this afternoon and I’m out of trouble. A fleet, it takes a long time. So the people that are smart and use data to adjust their business regularly are still successful today, even though it’s a very challenging market.
Brent – 00:18:27:
Yeah. Well, I appreciate you talking about data and stuff. And I appreciate you saying this because obviously this podcast is not just for those that want to hear about the story about ATVs. It’s really an operational piece of advice for any owner operator, small fleet person out there, because you get to see a tremendous part of the marketplace, and you get to see the operators that navigate through good times and bad times. And what are the things that they do? What are those operational things that they do to help them make it through? And certainly the advent of technology and data being at their fingertips, at anyone’s fingertips that wants to have access to it, can help them adjust to their business. Because as a business owner, you’re a business owner. I’m a business owner. It’s the things that you don’t see that are the challenge. If you can see it, then you can adjust to it. So you’ve been around this a long time. So from a standpoint of like working inside this industry, what does, some of the things you’ve seen change other than technology? I realize that data, the data explosion has been a big part of it. What are some of the other things that you see when you guys are talking to owner operators and carriers in the market that you’re advising them on? Like, make sure you’re looking for these things. I realize we just went through tax season. So this kind of timestamps this podcast, which is always a very busy time at ATBS, but you’re not just a tax season company. You’re a year-round advice company to these guys. So what are some of those operational things that ATBS and you’ve seen that really helped them fundamentally in their business?
Todd – 00:19:41:
You know, I mean, favorite thing about what we do is we work with 20,000 drivers, give or take on a daily basis, doing their books and taxes. And so doing books and taxes sounds pretty boring. And honestly, it can be pretty boring, but as you know, when you gather that much data and you put it and make sense, what we do is benchmark our drivers. And it depends if you drive at a fleet and we’ve got a thousand drivers, if you’re in the bottom 500, we’re going to benchmark you on the bottom 500. If you’re in the top 500, we’re going to benchmark you on the top. If you’re in the spot market and you’re running reefer, we’re going to compare you to other reefer drivers. So every single month, your profit loss statement has a benchmark, a red dot and a green dot. Red’s bad, green’s good. So I don’t have to be an expert in looking at a profit loss statement. I simply look for red dots and green dots. And where I’ve got green, I’m doing good. I’m above average, keep doing it. And where I’ve got red, something’s wrong. I’m below my peers in the business. And so our mission statement to do accounting and tax work for drivers, the second piece of it is what gets us excited to help them live a better life. Our drivers make more money on average than owner operators in the industry because we kind of force good practices on them. Those benchmarks pinpoint exactly where we’ve got to have a conversation. They may have been doing great during COVID and making a ton of money. The market changed quick, right? The rates went down and fuel spiked. And that meant a little 180 in how I’ve got to do business. I now have to slow down and I now have to take loads and not be choosy. Driver are. It’s really hard to change once you’re in that mentality. But when I’ve had green dots for two years and I’ve been kicking butt and making a ton of money, and all of a sudden I’m getting red dots, drivers get pretty defensive. Like, what do you mean I’m not in the top half, man? I was killing it. I’m not making as much money, but I’m still pretty smart. Why am I not doing better than other guys? And it opens up that conversation. So the good news is our benchmarking helps keep them ahead of the curves in the business because automatically as things change, the best get better. And I want to be one of the best.
Brent – 00:21:41:
I’m glad you brought up the benchmarking thing because most organized businesses that are a part of like associations or groups or something are put into benchmarking groups. And sometimes they’re called like 20 groups. And for every nation, if you hear that this is a new word to you or a new sort of a way in which you look at your business, it’s basically just putting your business in with a lot of other businesses that are like yours and then doing the averages. What works well? What’s not working well? So Todd, here’s why I want you to talk a bit more about this, because if I’m a one truck, two truck owner operator, the idea of like, I’m in a benchmarking group or I’m in a group that’s of like kind and being able to compare myself, I’m going to guess that’s a little bit of a foreign experience for them. But you guys do it and the results are phenomenal for the trucking company because they’ve never really compared themselves against others. It’s easy to compare yourselves against what I did last month or last year against yourself. That’s not the best way to measure it. Could you talk a little bit about why the benchmarking is important, some of the benefits of it, and then how do they go about getting into one of them.
Todd – 00:22:41:
Yeah, you know, for me, the light bulb was probably turned on. For me, the Truckload Carriers Association, which just had their meeting and you were there, they started this 20 years ago and I sat in one of their meetings and some of the best, most successful truck lines in the country are because they benchmark with each other. It doesn’t mean they’re trading secrets and they’re collaborating or colluding. And I saw that and I was like, wow, these guys are really learning from each other. And so that was our goal was to take our information. And create something similar. So you’re in a benchmark group with us. You’re not in a 20 group with 20 other drivers talking about it on a monthly basis. But because we have the data, we can put you on a benchmark group, but people that operate much like you. And we talked about there’s so much information, it’s overwhelming, especially for someone that doesn’t have a finance degree, which most drivers don’t. So really our success has been to take complicated data and make it very simple for you to understand what you need to act on. And I think in benchmarking, that’s the key is you can give me all the information you have, but unless I know how to act upon it, it doesn’t really matter. And so that’s our goal. And I know I hear you talk to Brent and the stuff you guys provide. Let’s take the data and make something meaningful out of it. That’s really what benchmarking is, is take a lot of information, boil it down to what matters that we can take action on to be more successful.
Brent – 00:24:02:
I appreciate you kind of going into that because for Freight Nation, as you’re watching and listening out there, I really want you to take this to heart because you’re a small business owner, right? Whether you own one truck, two trucks, three trucks, five trucks, you’re a small business owner. The thing to do is to always be measuring yourself on what does success look like. And by the way, it looks different in different quarters and different half years and different total years. You’ve got to measure yourself, not just against yourself, because that’s easy to measure, right? Measure yourself against others and learn from them. So this is what the benchmarking is. I remember when Todd first introduced me to benchmarking for owner operators, which I knew all about this for small fleets and people that I know that are larger businesses, but for a one truck owner operator, remarkable. So find a way to benchmark yourself against others. ATBS is an incredible opportunity for you to do that through their benchmarking. Take the opportunity to be able to do this. All right. So working with your family is a big part of trucking. There is a lot of people that work with their families, stuff like this. All right. So you get to not just work with your children that work with you some. That’s kind of easy. They’re your kids. It’s a different thing when you’re working with your brothers, especially if you’re the middle brother. All right. So trucking is a family business in many areas. Talk a little bit about what it’s been like to work with your older brother, Jeff, and your younger brother, Matt. So talk a little bit about working with your family, some of the ups and downs with it, some of the things you’ve learned along the way.
Todd – 00:25:21:
Yeah, man, that’s a great question, Brad, because we get asked all the time. We’ve been now working together for 35 plus years. Guys, if you go back to 12 years old, we’ve been working together a long time. And people say the middle child is screwed up. I’ve never believed that. I’m sure you don’t believe that, but we probably are. But we find ourselves in different roles, right? Oldest, middle, youngest, all have different influences. I think probably two things. One, we say if there was four of us, it might be a problem because we have 50-50 tie. But with three of us, we can have knock-down, drag-out arguments. But at the end of the day, we respect and love each other. And we know that two out of three wins. And it’s never the same two out of three, depending on the discussion, the situation. And so it’s a great thing. It’s almost like having a board without having to have a board because we’re not afraid to be frank and honest with each other. And I guess I would also say the second point is as mean as we can be to each other, not in a bad way, but saying things you wouldn’t say to the normal person. You can say things to family that you wouldn’t say to others about like, that’s the dumbest thing I’ve ever heard. What are you talking about? Some people you work with wouldn’t show up to work tomorrow if you said that to them. But you can say that to your brother because you respect each other. And I know they’re going to show up tomorrow. And they know I’m going to show up tomorrow. And in today’s world where a lot of people don’t show up tomorrow, it’s really nice to have that feeling that we got each other’s back and we can all hold each other accountable. For me, more than anything, that’s what it is. I know families that have had… I’ve had fistfights on the floor of the truck line between father and son and brother and brother. We’ve never punched each other. Well, I take that back. In the early days of the shop, there may have been some bloodshed and stuff like that. But once we got old enough to realize we’re better together than apart, working with each other is such a blessing. I can’t say, Brent. And it’s rare. There’s a lot of people that… A lot of families that I can’t hop on it. But our mom and dad raised us to care and love. And so that’s what we do.
Brent – 00:27:12:
Right. Well, I’ve always found it very unique watching you and Jeff and Matt work together. By the way, Freight Nation, they’re not the same personalities. They’re very different personalities, all three of them. They all definitely have their strengths and weaknesses in the way they run their business. But it’s been remarkable to watch the way in which all three of you go about having a heart for the small operator in this marketplace. And so 25 years is a long time to own any business. You guys obviously created good success. You’ve partnered in different areas. I know that there’s been times where you’ve been partnered with a truck manufacturer to help them actually market their product and also ensure that the buyers of their truck are not the same. I know that a lot of trucks had success at least the first few years when they used your product. So in navigating the years of American Truck Business Services, you guys have had some points of view where, okay, we’re going to do more of this this year. And then two years later, okay, well, maybe that’s not working. We’re going to shift to here. What are some of the areas in which you found that you had more success? And then where are some of the areas where you’d say, okay, well, I probably do a little less of that just in navigating the functional sort of relationships in your business?
Todd – 00:28:12:
Yeah, man, that’s a good question. You know what I’ll say, Brad? If I went back 15 years ago, we were a heavily fleet partnership-based company. So we would work with truck lines that had a lot of these purchase programs because that was the easiest place for us to have success. They were all branded on our operators and they wanted to learn. And really what that meant was a lot of those long-term drivers that had been on our operators for 25 years learned from their uncle or dad or whoever had found success. They didn’t really feel like they needed us. And so that was our focus was those fleet-based. And there was a very, I don’t know. There was a lot of tension, right? Because the fleets wanted to retain those drivers. And if they went out at the open market, that was discouraged, right? Because that was capacity that left them. Through legislation, lawsuits, changing economics, it’s really strange how those worlds have come together and how fleets now want their drivers to have choice because they should have that. They’re independent and they’re free, right? And so it’s really neat today. I’d also say that when I work with a fleet driver, it’s easy because I get data downloads. All that information is already in a fleet’s computer. So the accounting is easy. When I work with an independent driver, I get that Jack Daniels box of a thousand pieces of paper I got to figure out. So it’s a much higher cost. But technology has made it kind of merge where we can do business with both drivers at a similar cost structure. And it’s not really a competition anymore. We’re all in business to be successful as an industry. And those fleets actually want a lot of those independents to survive because they have brokerages and they put freight out on truckstop.com. And they want that independent. Independent driver to haul their broker free, right? So it’s gone from being a very competitive us versus them kind of a market to a collaborative market. And so we’ve had to morph our thinking to the driver shouldn’t just be at the fleet or the driver shouldn’t just be independent. It’s one or the other. The market changes and drivers change and there’s a right spot for each of them. A piece of our job is to help them figure out the right place at the right time for themselves.
Brent – 00:30:09:
Great point. You talked about some of the things that have changed where you talked about some of the regulations. I do want to hit on that because I want to get your opinion on the independent. Contractor thing going on because you talked a little bit about collaboration and working together where you guys have realized that things have pivoted a lot in the marketplace and changed. So that’s super important in any business is learning to pivot fast, right? But it’s how do you adjust your business? And you mentioned this in the beginning when you said, hey, man, somebody’s got 10,000 trucks. It’s going to take them a year to implement something. But a one or two truck owner operator can do it tomorrow. So talk about the drive and the benefit of pivoting quickly from one idea to another. An idea that might not be working as well in a marketplace is challenging like we have now to a new point of view on something. Talk a little bit about as a business owner, why that’s so important.
Todd – 00:30:55:
You know, I learned a good lesson early on. We were the first fleet in America to put in satellite tracking with a company called Geostar. And that was before Qualcomm really took hold. We wound up in a lawsuit because the system didn’t work and it cost us a lot of money as a small fleet, you know, hurt us financially. And so there’s a difference between being on the bleeding edge and the leading edge. And so pivoting your business at the right time in the right way is critical because you can always be chasing that shiny dollar and the next best thing. And sometimes you got to be happy where you are. So I’m not giving you an answer to your question other than to say, you got to stay aware of what’s happening in your market because things move quickly today with the information that’s out there. The easiest example is during COVID, I didn’t have to run north of I-40 and I didn’t have to run under 70 miles an hour. I could run the Sunbelt and I could make a ton of money. But the world changed. And now I got to drive in the snow and I got to go to the northeast if I want to make money. Right. So I got to know when I’ve got to pivot my business to be successful and survive. And that’s the simplest example I can come up with. Some drivers are stubborn and they say, I’ll never do that. I hate those people in northeast. I’m not going up there. The tolls, the rude, the, you know, my trailer’s going to get broken into and robbed. But I got to find a way to be successful doing that in this market.
Brent – 00:32:09:
Right. That’s one of the things that as I went from working for Overdrive on the marketing ends or the marketing and advertising. Industry to the product manufacturing in to the logistics end. That’s the thing I’ve seen that’s been the biggest challenge when I look at small companies is they really seem to struggle some with pivoting quickly, even though the information’s right there at their fingertips. You talked a little bit about that, making sure you’re using the information that’s at your fingertips and understanding how you do need to change your business. Because right now it’s a difficult market from a standpoint of just making profit. So efficiency is important. Saving money is important. The idea of making sure that’s a focus in your business, not just running more. I do want you to talk about this. I want you to talk about choosing the right freight. You guys taught me so much. It like the fourth partners of business, but you talked about three different opportunities to look at freight. And then I want you to talk about contribution to margin, because I thought that’s another phenomenal thing that you get that ATBS and Todd Amen talks about. So talk a little bit about choosing the right freight because the data is right there in front of you, right? But you need to make sure you have an understanding of your operational expenses to be able to choose the right freight. And then I want you to talk about contribution to margin because I would say some freight nation, these two things right here are the two things. The difference between loving what you do and driving that truck and going, gosh, am I ever going to make any money? So Todd, take it away on those two things, because those are so important to the small trucking owner.
Todd – 00:33:26:
Yeah. Well, this could be a eight hour podcast if we keep going Brent. So I’m going to make this as simple and non accounting sounding as I can. And this goes to really just understanding your costs in your business. And so choosing the right freight, everybody got used to during COVID, you know, I’m not going to take anything under three bucks because. That was the minimum bar and it paid a ton of money. And all of a sudden when loads are paying about 85 and two 15, and I’m not going to all that stuff and drivers parked our trucks. So bottom line is if I know my costs, there’s different times of the week, the month, the year, depending on my truck cost me to pay all my maintenance costs are what my fuel costs. Let’s just start with fixed and variable costs, fixed costs, or what I pay, no matter what happens. If I park my truck for three months, like a lot of drivers did when we came out of code and fuel spiked and rates went down. I still got a truck. Payment. I still got insurance payments. So I’m still paying fixed costs. My variable costs are what make my truck go down the road. That’s my fuel. My maintenance. I’m not running miles. I don’t have to pay those contribution margin is a combination of both of those. And to keep it simple, once I paid my fixed costs, I don’t have to pay them again. Let’s just say I’ve got a $500 a week truck payment and I pay it by Tuesday because I had good loads and I ran miles. So I paid my fixed costs because I got a $3 mile load and I ran 500 miles those two days. So. I made enough money to pay my truck payment and pay my insurance payments. Now I’m operating on my variable costs. My contribution margin is what I’m paying. Just my variable costs, my fuel and my maintenance, because I’ve already paid my truck payment. So now I might be able to run for a buck 85. Whereas earlier in the week, I might add the run for two 85 because I had a lot of cost to cover. It’s way more complicated than that, but that’s the fundamental concept is it’s also to do with backhaul and head all right. Like I might have to accept that bad load for a buck 80, to get me into a lane that is gonna pay me, 250 mile. But if I sit there for three days, I still got to pay my fixed cost and so I’m actually digging myself into a hole. So like I said we’ve spent entire days and weeks talking about the details of that. And going through examples , I just want to give enough to tease a driver to say that you should learn that email. They sound complicated, fixed variable contribution margin that stuff. You learn in intermediate Accounting in college but you can boil it down to pretty simple understanding those numbers. A company driver makes whatever they make per mile forever. They don’t make more if they drive more miles other than getting paid more by the mile. That’s the beauty of being an owner-operator. I can literally double my net income by being more productive and covering my fixed costs. So yeah, that’s enough. It’ll take forever to talk in details.
Brent – 00:36:02:
Look, I appreciate you giving the Brent Hutto so he can understand version. That’s always important. I am from Alabama, so you got to make it simple for us. So the reason I wanted you to bring it up and the reason I wanted to kind of close on this was because Free Nation, if you own a truck out there, it’s our heart at Truckstop. It’s Todd’s heart at American Truck Business Services for you to understand your business. And you don’t have to do it all yourself. You don’t have to do it all yourself. This is why Truckstop started in 1995. This is why ATBS started in 1998 because you don’t have to do it all yourself. There are people that are willing to help you do it at a very affordable cost to your business to help you be successful, to help you to be able to do the things you love to do, which is to drive the truck, be free, be out of the road and drive the truck. And so really, that’s one of the reasons why I was excited to have Todd on today is other than to catch up with my friend was to really have him communicate out there that there are really good partners in the marketplace that can help you be more successful and help you weather challenging marketplaces like we’re in today in 2024. And so Todd, I really appreciate you being on today. And just talking all the way through it. We talked about family. We talked about you growing up in the marketplace. We talked about it is possible to have a win-win and how it’s important to understand your business all the way down to all the new modern things within a marketplace like resources like somebody can help you with your planning your business like ATBS does, like technology that Truckstop uses. And there’s other players in the market. I think the encouragement for Truckstop and ATBS is use somebody to help you understand this. And then looking all the way down into how you’re going to implement those in your business. So what a great sort of 101. How to run your trucking company. We went through today on Freight Nation. So Todd, thank you so much for being a part of it.
Todd – 00:37:36:
Hey, Brandon is always fun and inspiring to talk to you. And one thing I’d love to leave you with, and you brought it up a little bit. Our business model of owner operators is under attack from a lot of angles. The Department of Labor rule. I mean, the only thing I’m going to say is people have been telling me that my business is going away for 25 years since the day I started it because the owner operator business model has been under attack for 25 years. And one way or another, it’s going to be under attack for 25 years. It gets worse in some years and some political situations than others. But what I believe in my heart at the end of the day is this is truly the epitome of the American dream. You cannot outlaw until we live in a communist country. You can’t outlaw the American dream of a person getting a truck, starting their own business and going out and going into a 20,000 truck fleet. That’s what’s happened for 80 years in this industry. And it’ll continue to happen. So don’t waste your time fretting and worrying that they’re going to put you out of business. Go out and manage your business and you’ll be just fine. It’s freedom at its best. And I love being part of it. Just like I know you do, Brent. Every time we’re together, we get excited to talk about it. So thanks for having me on, man. It’s awesome to talk to you.
Brent – 00:38:44:
Well, what a great ending to a great podcast. I tell you what, Freight Nation, wiser words than ever been said. There are companies and people out there actually looking out for your best interest, and ATBS is one of them. So, Todd, thanks for the heart that you have for this industry, for you and your brothers and your family as for this industry. And Freight Nation, that’s a wrap, man. You know, I hope you saw this as a great opportunity for you to learn, and I appreciate everything ATBS does and what Todd and his family do for this industry. And then, Freight Nation, as we always like to say, don’t forget to work hard, be kind, and stay humble. We’ll see you next time, Freight Nation. On behalf of the Truck Stop team, thanks for listening to this episode of Freight Nation. To find out more about the show, head to truckstop.com forward slash podcast. If you enjoyed this episode, make sure you hit subscribe so you don’t miss any future episodes. Until then, keep on trucking and exploring the open roads with Freight Nation, a trucking podcast.
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